Courts clear two Connecticut traders of wrongdoing

Former Jefferies Group managing director Jesse Litvak in March 2014 in New Haven, Conn.

Former Jefferies Group managing director Jesse Litvak in March 2014 in New Haven, Conn.

Photo: Michelle McLoughlin / Reuters

Courts clear two Connecticut traders of wrongdoing

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A Westport man was cleared Thursday by a federal jury in Hartford of charges he manipulated the prices of mortgage-backed securities while working for Cantor Fitzgerald, on the same day that a U.S. appeals court vacated the sentence of a former Stamford trader on similar charges.

David Demos, 36, had been accused of lying to Cantor Fitzgerald clients, including an unnamed Connecticut firm, about the prices Cantor Fitzgerald was able to obtain in trading mortgage-backed bonds, with prosecutors having sought to prove that Cantor Fitzgerald reaped bigger profits as a result of the alleged subterfuge.

In a separate proceeding on Thursday, a former trader in the Stamford office of Jefferies Group was freed from a Florida prison, after an appellate decision reversing his prior conviction in which prosecutors accused him of lying about manipulating the prices of mortgage-backed securities.

It was the second time that Boca Raton, Fla. resident Jesse Litvak had won an appeal, with an initial conviction tossed on grounds a judge erred in not allowing Litvak to present evidence, with Litvak found guilty of a single charge after a second trial and reporting to prison last September for a two-year sentence.